08 January 2015
My wishes for the year ahead..
I didn't make any New Years resolutions, purely on the basis I very rarely manage to keep them! But if I were to make a wish list for the mortgage market, it would include Lenders becoming more lenient to the self employed, more lending for First Time Buyers and the over 65's and that we could find more builders! The latter point may not enthuse everyone, especially on a personal front living locally, but the economy undoubtedly needs more house building.
That said, there does appear to be much building work going on locally, mainly by large property developers. In addition, we are seeing many enquiries for those looking to build their own dream home. Many have been enquiring about mortgages to buy a property, knock it down and build a new one in the same location. These are normally called Self Build Mortgages or Development Projects. Others are looking at substantially renovating their existing properties. If you are considering either of these, have a chat with a local architect first to see if your plans are realistic possibilities. They will have a good idea as to what the local Council Planning Officers will accept and of course, what they will reject! Lenders then may look to lend funds on a stage payment basis. Stage one might be the foundations, stage two might be ground level and so on. Each stage would require sign off by the buildings inspector, and often the lenders own valuer, then funds would be released. The lender may not lend the full build amount, so be prepared to put in a reasonable deposit, especially at outset to demonstrate your own commitment. For extensions and renovations, it may well depend on the size of the work and what funds are required.
Some of the lenders in this sector may not be household names. As many lenders fight for customers business in a tight market, we are seeing some of the smaller lenders offering market leading rates as well as niche products to build up their portfolio and attract new business. Nevertheless, they are still there to lend and it is always worth shopping around before committing. Competition can only be good for the end consumer.